These are condensed flashcards on the content for AS1 Business Studies CCEA exam board. Exam technique in essay writing is the most important thing for business studies at A level so with these flashcards to blitz through (to make sure your content knowledge is up to scratch) you can focus ore time...
Stakeholder Groups
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a stakeholder is a person or a group of people who are affected
stakeholder definition by the business and therefore have an interest in the business
activities and a direct influence on the business
customers, employees, local community, suppliers, competitors,
stakeholder examples
shareholders/owners, pressure groups, lenders, government
- they want to have a say in the business
- they want sustained, long term growth
- they aim to make a profit, maximising the returns on their invest-
owners
ments (dividend payments); if the owners are shareholders
- they are responsible for decision making (dependent on type of
business)
- want to be part of a business that is efficient, stable, profitable,
successful with a growing corporate image
- they hope to gain prestige and power in their role, gaining high
personal rewards as a result; higher salary, promotion, bonus
- in large companies, managers are responsible for day to day
managers decisions that keep the business running, as well as some longer
term strategical decisions
- in profit-orientated businesses the managers are likely to benefit
directly from profit maximisation of the business through their
terms of employment being linked to business performance
- if the business performs poorly they could be made redundant
- they want job security
- they want higher pay
- they want fringe benefits e.g. pensions
- they want better working conditions
employees - they want opportunity for promotion
- they make operational decisions, carrying out the objectives of
the employer day to day
- they have the ability to impact the business positively e.g. by
working efficiently or negatively e.g. by holding strikes
- they want payment on time
- they want regular orders
- they want fair payment; the power often lyes with the buyer
meaning equilibrium prices determined by supply and demand
are becoming less commonly used leaving suppliers short due
suppliers to businesses cutting costs; they could hope for practises such as
fair trade, especially for vulnerable producers based in developing
countries
- they want efficient ordering services
- they depend on the business for sales, the business depends on
suppliers to continue production; mutual dependance
- receive goods/services from businesses that are of high quality
and a fair price
- good customer service included
- they want thriving competition to allow them to 'shop around' for
the best prices
- they want reasonable delivery times
customers
- they want good after sales service
- businesses depend on customers for sales
- customers are very important stakeholders as satisfying their
needs profitably should lead to financial success, helping to satisfy
many other stakeholders
- they want ethical, good, business practise
- they provide financial resources to businesses so businesses
can achieve their objectives
- short term creditors: typically trade creditors or suppliers that
the business has acquired resources from e.g. goods for sale,
expenses like electricity or rates. Typically paid within 60 - 90 days
- long term creditors: usually represented by financial institutions
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, Stakeholder Groups
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who provide funding in the form of loans, debentures, mortgage
etc.
- they want to receive full and regular repayments
- they want to be able to work with secure firms that they can trust
creditors
to make payments
- powerful stakeholders as can take legal action against a busi-
ness, affecting their ability to trade, if the business fails to meet
repayments
- they want thriving local businesses to improve employment
opportunities in the area and develop the local economy: through
the multiplier effect
- they will hope that businesses chose to put money back into
local community
the community through for example charity efforts or improving
infrastructure
- they want businesses to be respectful of the people living there
for e.g. keep noise and air pollution to a minimum
- they want economic growth
- they want low inflation
- they want law abiding, fair business practise
- they want successful, profitable businesses to boost the econ-
omy and reduce unemployment, reducing the amount of benefits
needing to be paid out
- they want to gain corporation tax from thriving businesses
- they want to encourage companies to export products to benefit
the economy
government - they must balance economic growth and the negative impacts
on the environment that come with this growth; in recent years
the environment has started taking priority so the gov. has been
stunting development of businesses more than before by ensuring
pollution and traffic are manageable whilst also protecting green-
field sites. E.g by encouraging the development of brownfield sites
and imposing taxes like the climate change levy or the landfill
tax. This increases businesses costs impairing their ability to
remain competitive which could potentially effect unemployment
negatively
- want to be heard and respected
- want to achieve the goal of their cause
- unlike other stakeholders they don't have a vested interest in the
success of the business as they don't depend on this, they only
want to fulfil their own cause
pressure groups - they may only have one cause e.g. stopping smoking in the
workplace or could be e.g. unions which have multiple objectives
when they organise a workforce
- they approach pressure groups take could be e.g. through lob-
bying, picketing or boycotting products or through indirect actions
like circulating petitions or raising awareness through publicity
- it allows for two way communication, with instant feedback and
so gives businesses free market research from hearing what
customers opinions and wants are. customer reviews can help aid
product development
- increased brand visibility if social networking pages are filled with
attention grabbing content for potential customers
- a business can respond to industry changes almost immediately
and be heard by their customers e.g. if there is a scandal in
the industry, an individual business could put their customers at
ease in a more personal way than issuing a statement to the
newspapers
- cheaper than traditional advertising methods whilst still increas-
ing customer awareness and brand image
- social content can improve search traffic on company websites,
boosting online sales by appearing in appearing in search results
2/5
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